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Cushman & Wakefield Comments on URA private residential price index flash estimates Q1 2024

Xian Yang Wong • 01/04/2024

Singapore's overall private housing prices grew 1.5% qoq in Q1 2024, based on URA flash estimates, easing from 2.8% qoq growth in Q4 2023. Nonetheless, homebuying sentiments remain cautious amidst heightened price levels, cooling measures, and slowing wage growth.

Overall private residential volumes remain muted. Private residential volumes reached about 3,482 units in Q1 2024 (based on data as of mid-March) and this represents a 20% qoq and 16% yoy fall respectively.

The increase in prices were driven by both landed and non-landed segments which saw price growth of 3.4% qoq and 1.0% qoq respectively in Q1 2024. Landed prices remain supported by local upgrading aspirations, limited supply, and heightened construction costs.

For the non-landed market, broad-based price growth was observed across all three segments with the Core Central Region (CCR) leading growth at 3.1% qoq in Q1 2024. The CCR could be seeing signs of catch-up growth given its historical underperformance. CCR prices grew by about 11% cumulatively over 2021 to 2023, starkly behind the Rest of Central Region (RCR) and Outside Central Region (OCR), which grew by over 30% each. That said, part of this outperformance could be driven by price fluctuations due to low volumes. CCR volumes are estimated to have reached only about 500 units in Q1 2024 (based on caveat data as of 1st April 2024), a decrease of 33% qoq, and the lowest quarterly volumes in close to four years.

OCR non-landed price growth slowed to 0.4% qoq in Q1 2024 compared to previous quarter’s 4.5% qoq growth. OCR’s prices continue to be supported by steady demand for projects with strong locational attributes. For example, Lentor Mansion, which was launched in March, contributed to more than half (55%) of Q1 2024 OCR new sales volume (based on caveat data as of 1st April 2024) at median price of $2,269 psf. The project is about 75% sold out.

Rest of Central Region (RCR) non-landed prices rebounded by 0.2% qoq, reversing from previous quarter’s 0.8% qoq decline.

Overall private residential price is forecasted to grow by up to 3% in 2024, easing from 6.8% yoy growth in 2023. We expect local demand for private housing to remain resilient, supported by still-low unemployment rates and strong household balance sheets, though buyer affordability remains weighed down and buyer resistance is set to rise due to still-high interest rates and heightened housing prices. Baring new cooling measures and unforeseen economic shocks, overall sales volumes are expected to end at 18,000-21,000 units in 2024, compared to 19,044 units in 2023.

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